In the gloomy global economic landscape, India’s for some time now has stood out as a beacon of hope and ingenuity, being heralded as the world’s fastest-growing major economy. Even with the ever-increasing global tensions owing to inflation and other geopolitical issues, the country was projected to grow between 6-7% in early 2025 along with estimating hope for the future. The Grus is driving the region’s ambition of commanding “Viksit Bharat @ 2047” vision of achieving $30 trillion economy by marking out developed nation status ng an mark.

While the narrative sounds appealing, the addressable and achievement is no walk in a park. Underlying the captivating subcontinent are struggles and issues deeply rooted in its history that s agreement create multifaceted challenges. The most complex web of obstacles that needs to be navigated with extreme care. How sustainable is the growth being witnessed? What realistically can be achieved? What barriers does the country need to cross to fulfil its the Viksit Bharat dream? Before addressing this, the answer lies somewhere in embracing the harsh reality of history.

From Independence to Liberalization: A Historical Arc

Post the 1947 independence period, India’s had an agrarian economy afflicted with colonial exploitation and a rampant industrial infrastructure. The initial decades were categorized by a state-led import substitution model. Through Five Year Plans initiated in 1951, comprehensive planning bolstered guiding investment alongside centralized control. Significant regulations on industries also characterized this period. While there was the establishment of basic industries and institutions, the economy slow relative growth, referred to as Hindu rate of growth. There was a green revolution in the agriculture sector mostly in the Punjab and Haryana but they still were fully dependant on grains.  

1991 marked a radical shift. The economy in shambles, with balance-of payments crisis, and having exhausted foreign exchange reserves, so Bharat had no choice but look for a major economic shift. Accompanied by the dissolving Soviet Union, the new Transformers introduced under prime minister P. V. Narasimha Rao and finance minister Manmohan Singh brought in the LPG reforms. Accompanying measures included abolishing the industrial licensing system for a majority of the sectors, lowering tariff and trade obstacles, devaluing the currency to encourage exports, welcoming foreign direct investment (FDI), and initiating the privatization of government-owned businesses. India’s membership to the World Trade Organization (WTO) in 1995 further integrated India into the global market.

These changes unleashed competitive spirit, increased entrepreneurial activities, and set a different growth trajectory for India’s economy. Moreover, the services sector diversified the economy, with IT and business process outsourcing emerging as key growth drivers. Manufacturing also advanced, transitioning from traditional small-scale handicrafts to large-scale factory production in steel (currently the world’s second-largest producer), automobiles (fourth-largest in manufacturing), electronics (second smartphone producer), and textiles. Further initiatives like the Production Linked Incentive (PLI) policy aim to strengthen domestic manufacturing and lure international corporations, especially given the “China Plus One” strategy.

The Current Engine: Drivers of Growth

As India’s growth story is now witnessing India’s became the 5th largest economy in the world in nominal GDP, it owes growth to several factors:

1. Domestic Demand: The consumption habits of a large and growing middle-class bolsters private consumption, which is the backbone of economic activity.
2. Investment Push: Accelerate spending on infrastructure by the government is epitomized with the National Infrastructure Pipeline (NIP) and PM’s Bharatmala Pariyojana. These programs are aimed at logistics, connectivity, and competitiveness which improve public infrastructure. The aim of these expenditures is intended to crowd-in private investment.
3. Digital Transformation: The use of Aadhaar and UPI is regarded as an advancement in the digital infrastructure which greatly changed the accessibility to finances and services along with improving inclusiveness, efficiency and fostering innovation.
4. Improving Labour Market Indicators: The most recent PLFS data has shown improvements with the Labour Force Participation Rate (LFPR) being 60.1 by 2023-24 and WPR reaching 58.2. The percentage of unemployed persons has consistently lowered over the last few years. Although this number has remained the same in the latest survey.
5. Maintaining Macro Economic Control: Slow rising inflation due along with a strong financial system helps in sustaining the economy.

Headwinds Navigation: Contemplating Challenges Ahead

Regardless of the astounding headway India’s made as of late, the myriad of issues that still stand in front of the anticipated vision for 2047 is something that requires serious attention.

Looming Geopolitical Uncertainty:

• The worrying state of the world’s economy has been adversely affected by hunting geopolitical conflicts, modifications to the supply chain, and policy standoffs which arise from key nations such as the US and its ever-changing trade policies and tariffs. Such external factors greatly hinder investment inflows alongside export demand.

The Employment Puzzle:

Despite attempt to achieve a post pandemic recovery, most analyses indicate modest movement in the employment figures which is a challenge in itself. The nature of the jobs being created, and their overall quality is worrying.

• Debate Around Jobless Growth: The existence of positive employment elasticity in the wake of expanding economies indicates that jobs are indeed increasing. However, there remains doubts about the quality of jobs that are being provided.

• Dynamically Informal: In India, an astounding 80-90% of the workforce operate from the informal sector which means that there are no job guarantees, lack of social welfare benefits alongside a minimum wage clause. The sharp upsurge in self-employment to 58.4% in 2023-24 appears to signal distress for many, rather than entrepreneurial stimulation.

• Lack of Formal Jobs: Yet we are still see a gap in the economy to create enough formal and well-paying job opportunities to utilize the countless number of individuals of working age entering the workforce every year.

• Youth Unemployment: Youth unemployment continues to be persistently high (for females, it is higher than 10.2% ) signaling a deficiency of available opportunities relative to skills and aspirations. 

• Low Female Labour Force Participation: India’s female participation in workforce at 37% is significantly lower than the global average of 50%, indicating underutilization of female human resources. 

The Skill Gap:

The gap between the skill-set needed for employment and the skill-set possessed by the existing workforce is critical. The educational system, despite implementing policies such as Skill India and NEP 2020, which aims at vocational education, India’s still too focused on theoretical frameworks. 

• Concerns regarding quality: Excessive reliance on underfunded training programs with minimal industry relevance or low hiring rates shrinks youth apprenticeships. Strange as it may sound, there is a growing number of unemployed, trained professionals. 

• Infrastructure gaps: A number of schools do not have sufficient laboratories, computer classrooms, or internet access essential for contemporary skill teaching. 

• Digital literacy: A significant portion of the youth population is devoid of even basic digital skills.

Inequality and Poverty:

In the socio-economic spectrum, while India’s successfully managed to reduce extreme poverty (removing over 100 million people above the $2.15/day line) , a large fraction still remains at risk, residing precariously just above poverty alleviation. Consumption inequality persists and is starkly evident, as is wealth concentration with the top 1% reportedly controlling a disproportionate share of national resources. Ensuring inclusive growth continues to remain the most challenging tasks. 

Infrastructure Bottlenecks:

There are still problems despite huge amounts of money pour into it. The funding gap in infrastructure development for India’s quite significant. Projects are often subjected to delays and cost overruns due to factors like land acquisition, regulatory capture, spending freezes, legal battles, and liquidity crises for construction companies. Slower than global standards recovery of contract enforcement is another hurdle. 

Climate Change Vulnerability:

Flooding, cyclones, droughts, heat waves and other such agriculture, health and economy crippling vulnerabilities make India one of the most climate change affected nations. India’s Need to develop along side its Net Zero target by 2070 calls for serious investments in mitigation (renewable energy and energy efficiency) and adaptation (climate-resilient infrastructure and agriculture). Adequate international climate financing needed to resolve this problem suffers from severe scarcity.

Steering Towards Viksit Bharat 2047

The Viksit Bharat framework captures reasoning for significant pillars such as: boosting economic productivity, advancing in all fields – health, education, and alleviation of poverty, construction of infrastructure, progress in technologies, effective governance, Environmental protection, as well as paving new ways for youth, women, farmers and disadvantaged people including empowering the disabled and aged.

To make this come true, an integrated approach is required in:

• Fostering Employment Opportunities: Emphasizing more on labor intensive activities along with capital intensive ones. To increase formal employment, enhanced conditions for job creation need to be instated as well as fostering higher women workforce participation.

• Skilling Revolution : Successfully achieving the NEP 2020 targets by vocational training reforms focusing on quality and standard industries, strengthened education institutional infrastructures, and greater sponsorship of apprentices by improving educational institutions.

• Making Infrastructure Work: Establishing and improving frameworks for acquiring and clearing land, enforcing contracts, bridging the funding gap by  timely completion of projects funded by government, private parties, international capital, and foreign investment.

Inclusive Development focuses on social development where welfare measures, progressive taxation, and policies aimed at social and regional inequalities are used to ensure equity on all societal levels.  Sustrainable Pathway emphasizes heavy investment into climate adaptation, transitioning to renewable energy sources, implementing a circular economy, and including environmental factors into all areas of planning and development.

Growth Reform means the work that has been done to facilitate doing business in the country by deregulating, reinforcing the financial sector, and assisting MSMEs and Startups. 

A Marathon, Not a Sprint

India’s economy has showcased its potential along with its tenacity since 1947. India’s endowed with demographic dividends, an energetic domestic market, and evolving goals making it economically central at the turning point of its Viksit Bharat 2047. With immense goals comes steep hurdles which can be grueling while trying to ensure stable domestic conditions, a satisfactory global outlook, and maintaining one’s focus on fully adopting sustainable, inclusive, job-creating, and environmentally friendly high growth policies. Collaboration between industries and the government coupled with the whole populace constantly demand policy focus, effective implementation, continuous reform, and collective effort. While India’s rise is distinct, the collective effort will help drive the nation and get us to the targeted 2047 mark.

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